Home » Amazon, Self-Publishing » Amazon’s Move That Should Have Authors Worried

Amazon’s Move That Should Have Authors Worried

28 February 2014

From Digital Book World:

In a blog post yesterday, Amazon’s Audible audiobooks service announced that it was lowering the royalty rates it paid content creators.

It’s not the first time that Amazon has lowered the amount of money it pays authors and publishers for the audiobooks they sell through its platform and, GigaOm news editor Laura Owen points out, it’s a reminder that Amazon could always change its royalties for Kindle ebooks.

Link to the rest at Digital Book World

Amazon, Self-Publishing

109 Comments to “Amazon’s Move That Should Have Authors Worried”

  1. FUD.

  2. Wow, that didn’t take long.

    • That’s because publishing has become just like national politics in the US. Anything even slightly negative the “other side” does is an opportunity to draw blood.

  3. William, excuse the ignorance, but what is FUD? Or is it something that cannot be spelled out in a family blog?

  4. Frankly, it does worry me. Not because it necessarily means they’ll lower ebook royalties, but because they lowered audiobook royalties, and audiobooks are a growing and significant market.

    • I haven’t moved into audio yet, but it’s in my plans for the future. So I am not happy about the lowering of audiobook royalties either.

      • I would be. What’s the difference between audiobooks and ebooks? They’re both ones and zeroes.

        Sorry, folks. I’m just as cynical about harum-scarum tactics as y’all, but this needs some consideration.

        • Audiobooks are way bigger globs of ones and zeroes.

          Also, while it’s *possible* to record them yourself, even I-am-my-own-editor me concedes that you need a nice microphone, a quiet place to use it, good recording and editing, and preferably a narrator who has talent and experience. They are in that respect *inherently* much more expensive to produce, and require more resources, than text-only books.

        • It might be a sign that Amazon needs more serious competition.

    • The more direct problem is that it makes it much more unlikely for a narrator to want to take a chance on a revenue-share with an unknown author, which drives the upfront cost way up.

      I went the author-narrator route (with a professional studio) for my first book (not yet out in distribution) and am praying that listeners are OK with that. That cost $1500 (14.5 hours, 440 page book), which is bad enough.

  5. Ugh. I wonder if they weren’t making their money back fast enough, or the money was rolling in and they just wanted more of it?

    Hearing ominous music in the background……

  6. I don’t think there’s any great need to panic, but it does drive home the need to have a wide footprint, with your work in as many formats and available through as many sales channels as you can. This was what Robert Gottlieb of Trident Media was driving at previously, and he does have a point.

    • That was my first thought–never put all your eggs in one basket. I’m never comfortable relying on one stream only. I wish competitors would get it together!

    • I think someone else mentioned you can use Createspace to distribute audio files.

      Yes, wide footprint. Today I sold equally across Kobo, Createspace and Amazon. Many months Amazon dips while Smashwords jumps. I’ve tried Kindle Select and I swear, it’s just the same people downloading free over and over and you never hear from them again, and they don’t buy on through a series, at least not in the case of my nine novels across three pennames.

      So I wish Coker would lean on Apple, Kobo and B&N to get their discoverability channels sorted out and user-friendly. Year after year goes by and it seems these alternative companies are too stupid to simply study Amazon and out customer-coddle them.

      For that matter, Smashwords itself ignores really simple fixes to catch up with Amazon, e.g. let’s get that International Mystery and Crime category up, please!

      • “So I wish Coker would lean on Apple, Kobo and B&N to get their discoverability channels sorted out and user-friendly. Year after year goes by and it seems these alternative companies are too stupid to simply study Amazon and out customer-coddle them.”

        That’s an excellent point reinforced by the AuthorEarnings findings. Gives indies a level playing field and we will make you money and you’ll be better serving your customers. It would be healthy for all parties.

        I’d also love to see a really great app-driven ebook store with excellent discoverability enter the market and give everyone a real run for their money.

        • Can’t happen with iOS, or Kindle would be there now. However, Google Play is big enough that this could work.

        • It’s *not* that they’re too stupid to learn. I repeat, it is NOT. It’s that if Amazon thinks you’re copying them they will SUE YOU WITH EVERY LAWYER THEY HAVE.

          When B&N first noticed Amazon, and noticed that Amazon had “one-click ordering” on their site — the feature where a customer who was logged in could click on a button and instantly purchase the feature — they thought “yeah, that’s a good idea” and they implemented a similar feature.

          Amazon sued them, hard, and B&N backed off.

          This is not Amazon Derangement Syndrome, this is recorded history. Amazon has great customer service, and a fabulous user experience… and they have a track record of going after competitors who try to implement similar ideas by claiming they violate copyrights.

          • Patents, not copyrights.

          • ” Amazon has great customer service, and a fabulous user experience… and they have a track record of going after competitors who try to implement similar ideas by claiming they violate copyrights.”

            Kind of like Apple. They are also very sue-happy.

          • Christopher, I don’t see how customer-centered service could be patented. I think it’s more likely that the suits in these other companies don’t want to lose the revenue the receive through “front table” placement– and they haven’t yet clicked to the size of the indie market and how much potential revenue there they’re missing out on.

            • Well I don’t see how one-click purchasing can be patented, either, since you’re not supposed to be able to patent an idea, just an implementation. But Amazon pulled it off.

              • One-Click Purchase can be patented because it’s a specific technical method for accomplishing a specific task, and Amazon was the first to put the steps together in a documentable way that was previously non-obvious (or, at least, the courts and the patent examiner held that it was non-obvious until Amazon did it). This is the entire reasons patents exist, to reward and incentivize those who (as Douglas Adams put it) “render the previously non-existent blindingly obvious.”


          • Well, I just bought a book from Kobo a minute ago to test this. One click to purchase, one click to confirm, after being shown an invoice. So, technically that might have been two clicks, but it took all of five seconds to complete the transaction.

            And the book I bought was suggested to me on the first screen (books you might like). It was, indeed, exactly the book I was looking to buy – book 19 of Patrick O’Brian’s Aubrey/Maturin series. I suppose that was a gimme for Kobo, since I have bought the others in the series. Still, it shows that Kobo did a pretty good job of emulating the Amazon experience, at least on this occasion.

            • Patrick O’Brian…swoon. Best series EVER.

            • The actual process I’m talking about, Daleo, is the “one-click buying” feature Amazon has on its site.

              • Sorry, I am not understanding the distinction. I bought the Kobo book with two quick clicks that took five seconds. That is about the same as Amazon’s book buying experience for me.

            • With Amazon, there’s just one click. You don’t have to click to confirm, you just click, once, and then click again on something else if you see anything else you want, and half an hour after you stop clicking Amazon tells you it’s sending you the order using the preset order settings you set up. I gather B&N added a “confirmation” click for the same reason.

              • Well, the difference between one click and a click, then a quick confirmation click is perhaps five seconds. Kobo gives an option to return to shopping in their store too.

      • I sort of wish Smashwords would focus a little more on retail and a little less on distribution to other retailers. They’ve made some great strides recently, what with the site redesign several other initiatives, including the Kindle email thing.

        And Sean, I kept thinking that during all the discussion of the new ebook subscription services. People kept calling them the “Netflix of ebooks,” when the funny thing is that one of the driving forces behind Netflix isn’t so much its subscription model as its recommendation engine.

        Amazon’s recommendation engine is among the best I’ve seen.

        • True, their recent revamp immediately resulted in some sales (from Smashwords directly, only one sale before that), which tells me they should focus on this more and they even outsell the people they distribute to.

      • CreateSpace allows you to sell audio files, but (officially at least) they have to be music, not books. See https://www.createspace.com/Help/Index.jsp?cid=02n70000000DiqW&orgId=00D300000001Sh9

        • I’ve been looking for the audio equivalent of large distribution, like ebookpartnership.com. I’ve settled on Spoken Word which distributes pretty widely and handles all 3 formats (Audio-CD, MP3-CD, Digital Download). Reasonable costs. But they seem to be quite a small company and getting out of the starting gate is… challenging.

      • Don’t hold your breath on Apple, even though of the three they could totally afford to overhaul their stuff. Apple’s discoverability problems go way, way beyond the iBookstore. The iTunes and App stores suffer from the same problems. And both iTunes and Apps have been around long enough, now – and there has been a big redesign of the UI – that it’s clear Apple thinks the discoverability in both is just fine, thanks.

        I don’t know that Kobo and B&N have the pocket money to pay the developers to make the kinds of changes that would be needed.

  7. It is unfortunate that there are no other sources for indie authors for putting out audio books. Unlike with e-books, Amazon doesn’t have much in the way of competition in this market. I was planning on putting out my books in audio and this makes me hesitant to do so. They may have shot themselves in the foot with this move. It certainly emphasizes that having books in Select might not be a good move. (And I do have two books in it, but won’t when those two expire)

    • You can always offer them direct to your audience through your email list or website.

    • Bards & Sages on KB suggested drivethrufction.com. She said it’s nowhere near Audible, but they do have something. They used to just be SF, fantasy, and horror, but apparently they’re now accepting other genres, like romance.

      Link: http://www.kboards.com/index.php/topic,179838.200.html

      Scroll down to post 203.

      Not sure how helpful that is, but it’s something to gnaw on (maybe).

    • There ARE other audiobook distributors. They’re just not as widely advertised or as well known among the indie community as ACX.

      • Can we get some names for people who want to investigate?

        • Well, just in the last couple days I discovered Big Happy Family – they produce and distribute, but I’d never heard of them before so I’m not sure how good they are. Open Book Audio is another one, but they’ve closed off submissions; not sure if they’ll open up again or not. I just found a place called feiyr.com. It’s a music sales venue out of Europe from the looks of it, but it also distributes audiobooks to the big outlets. They charge some setup fees (not much) but their royalty split is better at first glance than Big Happy. Then there’s Overdrive, but I’m not sure of their requirements. There’s another place called Westvoice Audioworks but I haven’t learned too much about how they do business. Their website is upfront about some things but vague in others and I haven’t sent them an email yet. I’m sure there are others I haven’t found yet.

          I have no idea how reliable some of these companies are, but they certainly bear looking into. IMHO, in light of the shenanigans going on with ACX.

          Also, I’d recommend J Daniel Sawyer’s book Making Tracks:: A Writer’s Guide To Audiobooks. He’s a whiz at this stuff and his book’s pretty great.

        • Someone on another thread recommended Spoken Word. I’d not encountered them before but looking at their site they look as though they warrant looking in to. Their advertised royalty split is better than some of the others I’ve encountered so far.

  8. I think I’m going to wait before I panic. This feels like Amazon tinkering with the system to maximize its overall effectiveness and efficiency, rather than a naked money grab, which is pretty much the opposite of how they do business.

    • To me it feels like one part of the Amazon empire indulging in a greedy money grab. ACX are part of the Amazon group, but they ain’t Amazon, and their blunder has created a huge amount of ill will towards both them and their parent company from the very people who have been its most vocal champions.

      • What’s the basis for you opinion that it is a “greedy money grab”? Do you know how much Audible’s overhead is? I have no idea, and honestly, I don’t think it matters much. They are offering a deal and you don’t have to take it.

        • Wllliam, I love your comments, and genuinely value your insights, but this is where I part company with the ‘Amazon can do no wrong’ division of the indie community, so buckle up.

          I think honesty has really advanced the cause of authors, so let me answer you honestly.

          You asked: “Do you know how much Audible’s overhead is?” No, of course I don’t. It may be that they are bleeding money and this is the only way to move into profit. But any distributor who with no real explanation and with only two weeks notice, slashes their suppliers cut by 20%, as a minimum, is deserving of some criticism. Let’s not forget the abolition of the escalator, which took rates to 90%. So you go from a possible 90% to 40%, and that’s something that authors should be defending? Or at best not commenting on, because it’s Amazon, and they’ve been good to us?

          Let me repeat that so that people get it. Before this announcement you could move to an effective royalty of 90% by partnering with ACX. Now ACX/Audible/Amazon have removed that, and it’s a maximum flat rate of 40%. This is after they have stealthily slashed the money that authors and more importantly narrators can make from royalty share by reducing many indie audiobooks to $1.99 (trad audiobooks are not affected as far as I know).

          Can you imagine the OUTRAGE if Random House had offered that as a standard contractual term, and then announced, with two weeks notice, that it was no longer in play? This place would have melted down.

          Finally you offer: ‘They are offering a deal and you don’t have to take it.’
          Of course you are 100% correct. No one is forcing anyone to take that deal. The same applies to the 25% net that publishers uniformly offer authors. The same applies to non-compete clauses. The same applies to reversion terms.

          So, in that case, what is the point of 90% of the discussion on this blog?

          I would argue that what has been valuable about much of the discussion here, and elsewhere, is that it has focussed on what is best for authors, and readers.

          As much as I take great exception to certain elements within traditional publishing, I equally take exception to any other entity doing the same. But, hey, “They are offering a deal and you don’t have to take it,” so what do I know?

          • This.

          • I think there’s a huge difference between “Amazon can do no wrong,” and “Before you make opinion-based generalizations like they’re just doing a greedy money grab.”

            I’ve never seen anyone in the indie community think Amazon can do no wrong. All I’ve ever seen is general appreciation of what Amazon has facilitated and a disinclination to view Amazon as some anti-trust violating Zonopoly.

            You mention what is best for authors and readers; how do we know someone didn’t effectively make the case at Amazon that this is the latter? Amazon is most shrewd and determined in its commitment to customers first–and I think here they chose making the listener experience better over that of the creator. Maybe they had good reason to. Who knows?

            • Will, If it helps you, I don’t disagree for a moment that Amazon has been a force for good. I’m just slightly dismayed that the same arguments that have been trotted out to defend the big 5 (“They are offering a deal and you don’t have to take it”) are now being offered in defence of Amazon.

              If it’s not a shameless money grab then I’m sure ACX will come forward and share some data with us – as opposed to unilaterally announcing that they are reducing their royalty payments from a possible to 90% to 40% with two weeks notice.

              If it is the case that SLASHING payments to authors and narrators is to their overall benefit, I would be intrigued to hear the evidence. As it stands, I remain sceptical.

              As you say, “Maybe they had good reason to.” Maybe a minimum 20% cut to authors and narrators, when they already discount audiobooks from indie authors to $1.99, is fantastic news for us. You could be absolutely right. We can only trust in their wisdom.

          • I disagree with you about a few things. Most of all, I think you’ve mischaracterized what I’m saying. I would and do say the same thing about Random House Penguin. They’re offering a deal and you don’t have to take it. If you write in certain genres and you take a standard publishing contract, I would assume that you have non-monetary reasons for doing so. I find it best to assume that people and corporations look after their own interests until they prove otherwise. The big traditional publishers have proven time and again that they don’t know what’s best for them. I find that shocking. Seriously, greedy corporations are normal. Stupid corporations are newsworthy.

            I’ve argued with traditional publishers and their apologists that they should change their boneheaded policies because it is in their own interest to do so. I would argue that about ACX if I knew enough to make that argument. Accusing a corporation of a greedy money grab is like accusing a Baptist church of proselytizing. Dude, it’s what they do. It can be annoying as hell, but it shouldn’t be a surprise.

            When I said maybe they had a good reason to, I meant that maybe it made sense to them. It might be a good business move. It’s possible they’ve underestimated the ill will the move will generate. Or perhaps they are willing to endure it because it accomplishes some other goal. I think it is entirely possible that this doesn’t have anything to do with making more money for ACX. Sometimes, companies pull stunts like this to send a message they don’t really want your business. It wouldn’t surprise me if they decided they would have more happy Audible customers if they offered fewer titles. The overarching Amazon strategy is well-known and fairly well-executed. Bezos writes it down every year in that letter he sends to stockholders. Judge for yourself how well they do at that.

            Don’t take anything I say as implying that this good for you or anyone else. Perhaps it makes you feel better to be outraged. I find it gets tiring after a while. Being an individual or small business that works with a big corporation of any kind is always dangerous. I have found that for me personally, it’s best to keep my emotions out of it and keep my brain focused on what my best response should be.

            • As a devoted Audible user I have noted a lot of junk showing up on Audible recently,e.g.,six minute long stories from the public domain read by bad narrators. If this manages to do away with some of this stuff I will be happier with my Audible browsing experience.

          • Good points, Sean.

  9. When competition is low, prices increase, or royalties decrease. Unlike with Kindle, Amazon does not have a proprietary product in audio devices, and market share may not be that important as it is with Kindle.

  10. I have so many things to worry about– this is so far down on the list as to be virtually nonexistent.

  11. I wonder if it even matters anymore if they lower royalties or not. Short term it may hurt, but with it so easy to self publish and sell products (who doesnt have paypal?), how long before we don’t have to use amazon? Maybe we just pay a small fee to amazon that links to our own web page. Let’s be honest here, and please believe I do love Amazon, but other than providing an easy way to sell/buy books, is it really worth the 30% they keep for an e-book? Thats a lot of money for virtual space. Right now I don’t see too many alternatives that would allow me to get people to find my books. But in the future, maybe there will be sites that advertise only, provide rankings on books that would be based on numbers sold, from data provided, and authenticated, directly from the author. Even now I would go to an authors website if I was a fan of their work.

    • Well that’s the trick. If discoverability is ‘solved’ ie someone invents a program that constantly covers the web and what your friends and people like you like and can take you there, or allow you to browse, then many of these places will be defunct (for things like this) and we can sell directly.
      Until then…

      • That would be great. I hope somebody is working on that. It does suck being beholden to big corporations. Even the good ones (and I think Amazon is one of the good ones), will ultimately do what’s in their favor regardless of what you need. You constantly have to try and align your needs with theirs and sometimes the power dynamic is just always going to be in their favor.

        What I really don’t want to see is Amazon start to become as ruthless as traditional publishing is towards writers. And some of the things Konrath has been pointing out that Amazon is doing do concern me a bit. I also think that as time goes on, Amazon is more likely to become like traditional publishing. Big corporations tend to lose their edge as they get older. The more power they have the less risks they take, the more they start to throw their weight around (not to mention the lazier they become).

  12. Amazon owns a big piece of the market. For many of us, they are the market. Market power can lead to abuse. Is it a wonder that the big publishers still take advantage of authors?

    Other players may come along so that Amazon faces competition in the retail space. Today, authors are better off than when we were stuck with printing on paper and the limited bookshelf-space model of distribution.

    Things will never be as bad as when Big Pub ruled, but if authors get squeezed, we may have to diversify the ways we distribute our content.

    • People who have the power tend to use it. Even if you don’t think they will. As long as it’s in their self interest to do so, why wouldn’t they? Sadly, I can easily foresee Amazon becoming just as bad as traditional publishing one day if authors let them.

      • A key difference between Amazon (at least for their KDP programme) and traditional publishers is that Amazon doesn’t own any of the rights to the books they sell, and so can’t prevent an author from publishing elsewhere. That ought to prevent them from becoming too abusive, at least while they believe they have viable competitors in ebook retailing.

  13. I’m shaking in my boots.

  14. Maybe it’s just me, but what I’m thinking is that somewhere, some young guy or gal is reading this. Their thought process might be something like this:
    “Wow, Amazon lowers audiobook royalties. That sucks for those authors. Wait, seems like there’s no competition for Audible and ACX.”
    *Spends 15min researching and confirming this online*
    “Hmmm, now there’s an idea for a start-up…”

    If I were 25, that’s what I’d be thinking. But I could be wrong, happens a lot.

    • Why would the person need to be 25? I’m nearly 40 and I’ve thought it. But your point remains: it could be a very good opportunity for a new player in the market.

      • It may be my personal bias because I regularly teach workshops to entrepreneurs who start up their first business: there’s hardly ever a 40-something in the group and lots of 20-somethings.
        Regardless of age, if somebody picks up this ball when Amazon fumbles it, I’m all for it.

  15. My thought on this is that, no matter how automated they make audiobook, audiobooks by their nature have more overhead for distributor. Also, they have a lot less competition for audiobooks in terms of relatively easy, one-stop solutions.

    So I’m not surprised that they “adjust” the business model.

    While it’s not unprecedented, when you look back at other Amazon programs, it is actually unusual for Amazon.

    IMHO it says more about ACX and Audible than it says about what Amazon is going to do with other programs.

    Audible may be popular, but as a customer, I have found them aggravating and incredibly user unfriendly. So after many tries, I have given up on them.

    The fact that Amazon is tightening up royalties may indicate that they are finding that their efforts aren’t quite as successful as they hoped, or are more trouble than they hoped.

  16. Like the source or not, this is a legit concern. ACX doesn’t do anything without Amazon’s permission, and they saw the opportunity to make more profit so they took it. I’m not among those who see every change as the sky falling, but it’s not spreading FUD when a change like this actually happens.

  17. I see no reason to utterly dismiss this as FUD.

    This may NOT be a harbinger of bad things to come for ebook royalties…but I see no reason why authors SHOULDN’T absolutely rule out that change either.

    Amazon has demonstrated a history of using strong-arm tactics against suppliers when it has felt confident of its dominant position in the marketplace, including demanding a high percentage of gross from publishrs for prominent placement — think of it as another way to reduce royalties.

    The only way to ensure that authors do not have to worry about a decrease in royalties is for authors to do what they can to encourage readers to ALSO patronize alternate retailers like Smashwords, Weightless, Baen, DriveThruFiction and direct vendors like Gumroad and show readers how easy it is to sideload their books onto their kindles. The more authors can diversify their sales sources so that they are not dependent entirely upon Amazon, the safer authors’ income streams will be.

    • It’s worth noting that Amazon’s royalties are already worse than most other ebook retailers, so they really don’t need to cut them.

      I often make significantly more when I sell a book through Smashwords (even via a third-party retailer) than through Amazon. However, my lifetime earnings on Amazon are now more than 10x my lifetime earnings through any other retailers. They’d be closer to 20x if Amazon didn’t cut the royalties to 35% so often (wrong country, wrong price, wrong phase of the moon, etc).

      • Yeah, I’ve been seeing many retailers in the 80 to even 90 percentage range on royalties. But you know what they don’t have? Name recognition. They don’t have the trust of a large number of readers yet like Amazon does. In the future, that could easily change. If it does, you’ll probably see writers flock to those retailers. Unfortunately, until then writers have to chase readers.

    • My point is that this event does nothing to increase or decrease the possibility of Amazon dropping KDP royalties. It’s totally unrelated and to use it as an excuse to rile people up over that is dishonest, disingenuous, and disgusting. It makes as much sense as saying this is a reminder that Amazon could raise Prime fees.

      Did they change ebook royalties today? No. Did anything happen today with respect to ebook royalties? No.

      Encourage readers to patronize alternate retailers is a total waste of time. Readers don’t need your advice. The only thing you can reasonably ask of readers is to buy direct from you and even then you will lose more than you gain if you try to make them buy direct. We aren’t responsible for helping you diversify your revenue stream.

      Amazon is winning in ebooks because they provide a better user experience for us, the readers. Until someone does it better, they will keep winning.

      • “My point is that this event does nothing to increase or decrease the possibility of Amazon dropping KDP royalties.”

        Of course it does. You act as if Amazon and Audible have no business relationship. The thinking that led to the decision to cut Audible royalties can become very infectious and appealing.

        • How does that work? What is the thinking that led to that decision? You seem to be better informed that anyone else outside of Amazon because I haven’t seen anyone who can credibly claim to know the reasoning behind this decision. Can you share the source of your inside knowledge?

        • Peter–

          Audible is a subsidiary of Amazon–it’s not Amazon itself. The two companies have different business models, different management teams, and somewhat different boards of directors. In any large corporate conglomerate, the different divisions function quasi-independently–for example, for about a decade Sony’s computer devices division made serious bank off the fact that its DVD drives were some of the easiest to use to circumvent DRM and enable movie piracy. This is during the same period when Sony’s movie division was spending billions in lobbying money to STOP piracy through lawsuits, regulatory schemes, and other means. You cannot assume that the right hand knows what the left hand is doing in a company this large–in fact, given Bezos’s general love of disruption and competition, it’s not beyond probability that the different companies Amazon holds would be trying out completely different approaches, and even competing with eacn other.


      • ” It makes as much sense as saying this is a reminder that Amazon could raise Prime fees…”

        They are raising Prime fees in some markets.

      • “Amazon is winning in ebooks because they provide a better user experience for us, the readers. Until someone does it better, they will keep winning.”

        I agree with this. Amazon is winning because the few other ebook-tailers out there are “doing it wrong” for the most part.

        However, that does not preclude Amazon from lowering royalty rates for authors, anytime they want; in fact having a captive audience of customers would in fact make it easier. If they started paying authors 25% tomorrow instead of 70%, would it stop readers from buying? Of course not, because readers have no clue who gets how much of the money, they’re just looking for a good book. Readers certainly weren’t complaining when writers got 6% (or worse) from traditional publishers.

      • Meh. I usually agree with your comments, William. But it is cause for writers to pay attention. I don’t think we can necessarily speculate as to what Amazon will do (none of us have enough information for that). But it is not “totally unrelated” either. To me, if nothing else, dropping the royalty rate for one part of their business, a part of the business that is associated with what we do, shows that they’re capable of doing it on short notice, which concerns me as a writer. Does it mean I’m going to run screaming from Amazon? Nope. I think Amazon is still run by pretty smart people who get that there are a lot of people watching what they do. I think they also realize that they have to cater to writers in order to keep them….for now. I also think Amazon would be quite willing to drop their royalty rates if they saw that writers don’t really have any other good options besides them and aren’t likely to get any anytime soon. They’re a corporation, after all.

        If nothing else, it’s good to take note of this.

    • This is also why it is absolutely necessary to start a mailing list so you are in control of information about your readers. If things with Amazon went way south (not saying anything like this will happen, but better to be forward thinking) you still want to be able to let your fans know you have a new book out somewhere.

      I’m not thrilled with the royalty change, but it won’t affect 9 of my books. And I may make not lock myself into a 7-year contract with ACX on future projects because who knows if something better (or even as good as) Audible will come up?

      I’m not panicking, either. I don’t like it, but I can’t change it either, so I’ll keep my options open for future opportunities.

      • You’re right, Heather. It’s not a reason to panic. It’s a reason to, if you haven’t started already, always be working on plan B. Just in case.

        But writers should be doing that anyway if their writing revenue is important to them. If they’re just doing it as hobbyists, then it might not matter what Amazon does at all. Everyone else should be, at the very least, paying attention.

  18. I think a couple of things actually do concern me about this.

    The top end went from 90% to 40%. The bottom end went from 70% (coincidentally, that is what one is paid per ebook priced 2.99 and up) to 25%. That is quite a drastic cut – when I saw the article snip I thought “oh, 10 or 15 percent” and was a little surprised to see the cuts are huge.

    To put this another way. How would you feel if, tomorrow, you found that your 70% royalty on books 2.99 and up was going to be cut to 25%? Because they could certainly do this, anytime they please. That would cut well more than half your gross income.

    And to those who think that this is happening because Audible has basically little to no competition for the ebook market… what do you think will happen if B&N goes under and they have one fewer competitors for ebooks? In other words, at what point will Amazon own enough of the market to lower royalty percentages on ebooks without fear you will flee to another ebook-tailer, because few or none are left?

    • What would happen is we’d all go and raise the prices of our ebooks and customers wouldn’t be happy. The problem with ACX is we have no control over the price so there’s no way we can compensate.

    • It’s always good to have competition for sellers and buyers. I suspect that if Amazon got too high handed, there would be space for competitors to move in, but that could take a while.

      • The fact that it could take a while is what concerns me a bit. I want the current competition to get its act together or for more competition to be making those plans *now*, not starting a year or more from now when it finally looks like B&N is really not going to make it. If potential competitors are smart, they’re constantly looking for unsatisfied parties right now that they can possibly service.

        While I don’t personally value bookstores much anymore, I would definitely still like for B&N to keep doing ebooks. I would like for B&N to offer significant competition to Amazon. I just don’t think the people running B&N are good enough to actually do that. I hope I’m wrong. I hope that Amazon does get more competition. Competition keeps corporations honest…or, at least, on their toes. 🙂

  19. How would you feel if, tomorrow, you found that your 70% royalty on books 2.99 and up was going to be cut to 25%?

    About half my $2.99+ sales through Amazon are currently at 35%. So, while it would suck, it wouldn’t be as big a difference as you imply.

    Amazon’s market share has been declining, not increasing, and their real competition is other dedicated online stores like Apple and Google, not book stores like B&N.

  20. Here’s the thing: Amazon has many programs which they evolve every day. They almost always make these changes for the better for the participants — though often they use it as an enticement to get people to behave in certain ways. (I.e. you get 70 percent if you price they way they prefer, etc.)

    And yet nobody ever acknowledges Amazon’s history. All of this strum and drang is because, for those who have Amazon Derangement syndrome, ONE negative out of so many positives is PROOF (PROOF I TELL YOU) that Amazon is now likely to go after Indie income.

    Like Will, I agree that Amazon may or may not make any kind of change at all, but this news is utterly irrelevant to the odds of whether they will do any particular thing with KDP.

    Look, it’s reasonable — even advised — to assume that any circumstance might change in your business. It doesn’t help to try to read the entrails in every report or trend. (Because that’s exactly what this is: soothsaying.) Be flexible. Have options. Do not depend on one source of income. Because sure as shooting, while you’re worried about this problem, a completely different problem will blindside you.

  21. I agree with everything Camille just said.

    And would add:

    It kind of makes sense that they might change the rates for audio books because it does cost them more to move these files through cyberspace. i.e., there is more in play for their bottom line than just arbitrarily taking money from producers.

    As far as changing the rates for ebooks: They can do what the want, obviously. But it seems like they are very, very happy to have products that drive traffic to their site and also turn a profit while they’re at it. I think just having the book store filled with stuff to click through is hugely valuable to AZ. More valuable, perhaps, than the ebook money itself.

    • You’re probably right. I think Amazon also values being able to collect information on customers, which I think they also sell as a side business as well. I think I read that somewhere (will have to hunt down the article). If they aren’t currently doing it, then they’re in the process of figuring out how to monetize that information. So information itself is important to Amazon as well.

  22. “The move, Amazon said in the post, which takes effect March 12, 2014, will, in part, encourage authors to become more aggressive marketers. With the drop in royalty rate, for authors selling their audiobooks exclusively, Amazon has bumped up its “bounty” program. The bounty is the amount awarded to the author (or royalty earner) whenever an audiobook is the first purchase of a new member of the program. Previously the bounty was $25, and now it is $50.”

    So the whole point was for Amazon to use us as their salespersons while reaping even more profits off our sweat. That’s rich.

    That’s also pretty naive of people known for their business acumen. All it actually encourages me to do is to shun the exclusivity option and look for other distributors. Hello new potential customers. Nice to meet you.

    I’m not even sure I’ll let amazon carry the audible version of my upcoming audiobook at all due to the arbitrary price-slashing caused by whispersync.

  23. I wonder if this is a prelude to Audible dropping the prices on their audiobooks, and going for something like a $9.95 price point? Long term, a lower price point should increase their sales, but dropping the royalties might be a way of ensuring that short term they have enough to safely cover overhead and profit margins.

  24. I just wish ACX would deal with non-US authors. They said they’d start to do that in 2013, but it hasn’t happened.

    • ^ This. I’ve had a couple of enquiries from readers who want to know if I have audiobooks available, and have had to say, “I’d love to, but I can’t get distribution.”

      • See the following for a possible option for non-US authors to get into ACX…

        If interested, be sure to search/review his more recent posts (click his profile, then the ‘search recent posts’ link, to get a sense of how it is going… and particularly what he has run into recently with ACX in general and the royalty drop in particular. And of course review what others experience with it has been. It’s new, changing and subject to bumps in the road.

        May or may not be of interest or a way to go… you’ll have to decide for yourself.

        • I saw this – but it’s putting huge trust in a stranger.

          What happens if there are problems, or communication ceases? One would have no way of sorting it out, and worst case scenario could lose control of, and profits from, one’s audio books that had cost a considerable amount to set up.

          • Ebookit offers the same sevice (for a 15% cut).

            • Ebookit don’t seem to have a wide range of voice artists – for instance, no UK females, which is what I would need.

              • Sorry I didn’t make it clearer. I meant using ebookit as a way of submitting audiobooks to audible since they won’t work directly with self-publishers.

                As for voice talents, I’m currently working with one I hired on elance. You can also have a look at voice123(dot)com. They boast a sizeable narrator database (300 hits for UK YA female voice).

  25. This might have been mentioned in the comments which I couldn’t finish reading (Holy commenting, Batman!), but is it possible that the discount on audiobooks offered when paired with an ebook (et al) could be part of the reason AZ is doing this? (Not a death saber rattle but simple math?) I’m on the receiving end of this so my first thought is to *gulp*, still…

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